Realizing economic growth and carbon reduction: what is the potential for distributed photovoltaic construction?

Junjie Zhen () and Yubao Wang
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Junjie Zhen: School of Economics and Finance, Xi’an Jiaotong University
Yubao Wang: School of Economics and Finance, Xi’an Jiaotong University

The Annals of Regional Science, 2026, vol. 75, issue 1, No 3, 29 pages

Abstract: Abstract Energy transition is a key element of the global sustainable development strategy, and objectively assessing the role of renewable energy policies in environmental protection and economic growth is essential for effective policymaking. This study evaluates the emission reduction and welfare effects of distributed photovoltaic construction using a difference-in-differences model as a quasi-natural experiment, based on China’s “photovoltaic Poverty Alleviation” pilot policy from 2014 to 2019. Results show that distributed photovoltaic construction generates dual welfare benefits: it reduces carbon emissions and energy intensity while significantly increasing regional GDP and narrowing income inequality, reflecting the characteristics of universal social policies. These findings remain robust after multiple validity tests. Spatial analysis further reveals significant positive clustering of carbon emissions and GDP, with improvements in one region inducing similar changes in neighboring regions, thereby amplifying policy spillovers. Mechanism analysis indicates that energy-dependent regions in central and eastern China enhance these effects through green finance, while benefits in western regions are limited. Moreover, residents in renewable energy-rich areas experienced marked gains in income, housing area, and income growth rate, confirming the conversion of green assets into economic welfare. Overall, the findings provide policy insights for promoting regional coordination and economic growth through distributed renewable energy under the global shift toward cleaner energy.

JEL-codes: Q43 Q51 (search for similar items in EconPapers)
Date: 2026
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DOI: 10.1007/s00168-025-01435-w

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